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From the look of the markets today it seems like the relief rally
prompted by the (overly optimistic) assumption that the euro zone
problem was contained has ended.

There many areas of weakness, but a look at the October
ISM data will serve to illustrate the point.

The headline PMI of 50.8 (down from 51.6 in September) is
still signaling expansion, though a weak one. But the devil
is in the details:

Inventories are down (46.7 from 52.0)

Customer’s Inventories are down (43.5 from 49.0)

Exports are down (50.0 from 53.5)

Imports are down (49.5 from 54.5)

And of course China’s PMI is down to 50.4 (from 51.2), its lowest level in
since February 2009.

Export growth is down not only in China but also in South Korea
and Taiwan as well, suggesting that the impact of belt-tightening
among consumers in developed economies is starting to be felt.

Folks, this is a not a recovery. We are limping along on
the road to a double-dip.

About the author:

David Johnson is a partner with ACM Partners, a
boutique financial advisory firm providing due diligence,
performance improvement, restructuring and turnaround services to
companies and municipalities. He can be reached at 312-505-7238
or at david@acm-partners.com.